The National Export Initiative (NEI) was launched in January 2010 with the goal of doubling US exports in five years, by December 2015. The Obama Administration has been touting its successes towards meeting that goal ever since. The US Foreign Commercial Service (USFCS) is critical to success of the NEI in helping US SMEs connecting with customers and distributors in overseas markets. In effect, USFCS acts as the trade and export department for SMEs that, unlike large multinational corporations (MNCs), don’t have the funds or resources to bring such expertise in-house. Having USFCS “boots on the ground” helps the level the playing field with other countries who provide similar trade promotion services to their national SMEs at no- to low-cost.
In June 2012, the International Trade Administration of the US Department of Commerce published a notice and request for comment on proposed increases to user fees for trade promotion services through the US Foreign and Commercial Service. Under the proposal, fees for small business exporters to utilize two important programs, the Gold Key Service and the International Partner Search, would be increased more than 150% over current user fees. We find it extremely disconcerting that exactly halfway through 5-year NEI period, the USFCS would propose to increase fees and thereby stymie US SME exporting firms.
Increasing USFCS user fees puts far more strain on US SME exporters than on large companies. Furthermore, increased fees could result in SMEs looking to their state and local export promotion agencies and trade associations to bridge the gap for such services. We understand State Trade Export Promotion (STEP) grants are often used to help US SMEs utilize USFCS services. Increasing fees diminishes the value of such grants, many of which do not fully cover services currently.
TradeMoves supports SMEs, and in particular, US SME exporters. We support the positions taken by the District Export Council (DEC), the US Chamber of Commerce, the Industry Trade Advisory Committee for Small and Minority Business (ITAC-11), and SME owners that user fees for SMEs should not be increased. USFCS received more than 170 comments on the issue with most submitters opposing the fee increase altogether.
On behalf of SME exporters, TradeMoves does not want to see de facto trade barriers erected by our own Commerce Department and US SMEs inadvertently disadvantaged. Instead of proposing outrageous fees, USFCS should be proactively engaging SME users on ways to improve the programs, create efficiencies and avoid redundancies. As a first step, we urge Commerce to forego the fee increase and reach out to ITAC 11, the DECs, industry trade associations, and state and local trade promotion agencies to seek their advice going forward.
For more information on the proposed fee changes and how they may affect your small business and US exports, please contact TradeMoves LLC.
Shawn Marie Jarosz / SJarosz@TradeMoves.net / 202.415.4016